Cloud adoption has shown no signs of slowing down. In 2023, the cloud market is set to reach US$3.6 billion in Singapore alone – with similar growth trends replicated across other markets in the Asia Pacific (Apac) region as well. Especially as countries in the region pursue Smart Nation ambitions and efforts to grow their digital economy, the cloud will remain a massive enabler for digital transformation in the coming year.
However, this record growth does not come without costs and obstacles to manoeuvre. In 2023 – a year that will be driven by recession worries and extreme cost sensitivity – businesses will need to ensure their cloud strategies are built to scale without compromising security, governance, or agility to respond to the dynamic business environment.
1. Growing environmental and geopolitical threats will make data sovereignty a primary concern
With increasingly turbulent waters to tread in the form of both natural disasters and geopolitical tensions, ensuring data sovereignty will become a non-negotiable step for businesses. We are already witnessing that in effect today. In Japan, we decided to build one data centre in Tokyo and another in Osaka, 500 kilometres away, because of considerations around floods, tsunamis, and earthquakes. This is unsurprising given that economic losses from such incidents cost the Apac region US$72 billion in 2021.
Similarly, there is very little latency between cities in neighbouring countries -- such as Singapore and nearby Johor Bahru in Malaysia -- and yet data sovereignty concerns are driving demand for separate data centres to be built in-country itself. Especially as the digital economy of the region continues to grow and data continues to drive value, storage needs will become increasingly local.
In 2023, we will then see growing threats such as severe natural disasters and geopolitical conflicts become key players in organisations’ data backup and archiving strategies. Next year and beyond, it will be more critical than ever for organisations to think carefully about the location of their data backups to help avoid catastrophic data loss.
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2. Move over 3-2-1-0: Speed of access over storage availability
The 3-2-1-0 rule is well-known by all. Focusing on backup availability, it requires businesses to:
- 3: Create one primary backup and two copies.
- 2: Save your backups to two different types of media.
- 1: Keep at least one backup file offsite.
- 0 : Be sure to have verified backups without errors
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However, with nearly all cloud vendors today offering 11 nines of durability, having 3 copies means a lot less in preventing data loss than it did in the days before cloud storage became mainstream. After all, gone are the days when tapes broke, and files were corrupted while being transferred. To put things in perspective, 11 nines of durability offer so much redundancy that even if a business had one million 1MB files to store, the business would risk losing just one file every 659,000 years.
Rather, the focus for backup strategies will move from the availability of copies to the speed of access to those backup copies. Especially in today’s digital age, businesses are more susceptible than ever to attacks on their data - particularly in APAC, which remains the most targeted region by cyber attackers. With that, a backup strategy that ensures the seamless, error-free, and speedy restoration of services is critical.
3. Global recession worries spark a reckoning for hyperscalers
With the potential for a global recession in 2023, it is no secret that companies are moving quickly to tighten their belts. While the tech industry witnessed a surge in cloud adoption owing to digital demands brought on by the pandemic, recent headwinds have already impacted several industries in the Apac region and caused a slowdown in IT spendings, such as healthcare, construction and government services.
At the same time, inflationary pressures continue to rise, and hyperscalers are keen to maintain margins. Put bluntly: $/GB rates for cloud storage have stopped trending down; there have been no price reductions among leading providers since 2017, nor can businesses expect reductions in the near future. Instead, hyperscalers have simply opted to introduce lower-cost storage tiers, which in reality involve additional steps and expenses to realise the promised cost savings - from data transfers to new data lifecycle and management policies.
However, with businesses running on even tighter budgets in 2023, such lower-cost storage tiers will no longer suffice. Hyperscalers can expect to experience increasing pushback from customers over usage fees, like egress charges and API call charges for storage. Coupled with that, the call for lower costs has sparked a movement towards Cloud Financial Operations (FinOps) tools as customers seek support to closely monitor and optimise their cloud spending. Should hyperscalers meet these growing demands with a stalemate, businesses will surely opt for alternative providers that are willing to.
4. Cloud will play an increasingly pivotal role in preventing cyber threats
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Today’s business climate involves heavy reliance on virtual tools to support hybrid work environments across the globe, increasing adoption of SaaS tools, and continued growth of enterprise data volumes. Apac, in particular, is on the precipice of digital evolution, with the continued roll-out of 5G across the region, millions of new users set to join the internet in the next year alone, and businesses accelerating their digital transformation journeys. With such a digitally connected environment, it is inevitable that cybersecurity threats will persist and become increasingly complex in 2023.
The reality businesses must prepare themselves for is that it will be nearly impossible to prevent all the ways malicious actors can infiltrate networks, exploit unknown vulnerabilities, and target company data and backups to extort money from organisations. In many ways, security preparedness and malware prevention is a cat-and-mouse game; which is why so many organisations deploy security strategies which include not just prevention and detection, but data protection, backup, and recovery as well.
In this perpetual battle against cyber threats that risk downtime and data loss, cloud data management and protection features will be growingly critical tools in businesses’ arsenals. For one, cloud storage can enable businesses to quickly replicate secondary and tertiary copies of data in multiple regions and geographies without even the need to purchase or implement any local hardware. Businesses can also utilise the immutable storage capabilities offered by cloud providers, to mitigate against inconsistencies between active data and backup copies.
Sunny Chua is the Singapore General Manager of Wasabi Technologies